Auto industry has bright future, report says

The Conference Board of Canada has offered an optimistic outlook at the Canadian vehicle industry in 2010.

The forecaster says the industry, including heavy truck manufacturers, could post pre-tax profit of $263 million in 2010 and $668 million in 2011.

The rosy predictions came yesterday and contradict the board’s prediction from earlier this year when it said industry losses would continue on a huge scale through the next two years. The previous report blamed predicted losses of $784 million in 2010 and $213 million in 2011 on continued weak sales during a prolonged global recession.

The industry loss forecast has been raised though, from $2.08 billion this year to $2.3 billion.

“Although collectively, the industry will close 2009 with a $2.3 billion pre-tax loss, a new era is emerging,” Sabrina Browarski, economist, said in the board's latest report. “Massive cost cutting will gradually enhance the profitability of the Canadian industry.”

Analysts have been mixed about the board’s latest prediction but did say that new restructuring of some major manufacturers could help pull the sector out of the depths.